Nonprofit Resources

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3.2.21 | , |

IRS Releases Guidance on the Employee Retention Credit for 2020 Wages

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On March 1, 2021, the IRS released guidance on the Employee Retention Credit (ERC) as it applies to qualified wages paid in 2020.

The ERC is a credit provided under section 2301 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and then amended by the Taxpayer Certainty and Disaster Relief Act of 2020. Notice 2021-20 provides additional guidance on claiming the ERC for qualified wages paid from March 13, 2020, through December 31, 2020.

Notably, the guidance:

  • Provides employers with more detail and a conceptual framework for assessing whether they have had a full or partial suspension of services
  • Explains how employers should calculate and claim the credit for qualified health plan expenses
  • Outlines what qualified wages will be eligible for the credit if the employer has received Paycheck Protection Program (PPP) loan forgiveness

The IRS said it will provide separate guidance addressing 2021 qualified wages soon.

Please contact us with any questions.

Learn more about the ERC with our recorded webcast on “The Employee Retention Credit and Nonprofit Organizations.” Watch now > 

 

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